2 Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following 3 data are available for preparing budgets for Snare for the first 2 quarters of 2017 4 1. Sales: quarter 1, 40,000 bags; quarter 2, 56,000 bags. Selling price is S60 per bag. 5 2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tar at $1.50 per pound. 7 3. Desired inventory levels: lanuaryl AprL? July1 15,000 0,000 14,000 20,000 25,000 9 Iype of Inventory 10 Snare (bags) 8,000 9,000 18,000 13,000 Gumm (pounds) 12 Tarr (pounds) 13 14 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of S16 per hour 15 5 . Selling and administrative expenses are expected to be 15% of sales plus si 75,00 per quarter. 16 6. Interest Expense is $100,000. 17 7. Income taxes are expected to be 30% of income befre income taxes. 18 Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected 19 costs to be 125% of direct labor cost, and (2) The direct materials budget for Tarr shows the cost of Tar 20 purchases to be $297,000 in quarter 1 and $439,500 in quarter2 21 22 Instructions 23 Prepare the budgeted multi-step income statement for the first 6 months and all required operating budgets by 24 quarters. (Note: Use variable and fixed in the selling and administrative expense budgct.) Do not 25 prepare the manufacturing overhead budget or the direct mater als budget for Tarr. 26 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a" 27